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Mexican American artist Xavi has signed with WME for global representation in all areas, as reported by Billboard last week. The last few months have been pivotal for the 19-year-old singer-songwriter (born Joshua Xavier Gutiérrez) who kicked off 2024 with his first No. 1 on any Billboard chart thanks to his romantic corrido “La Diabla,” […]
Universal Music chairman/CEO Lucian Grainge has released his annual New Year’s memo to staff today (Jan. 9), and used the moment to largely congratulate the world’s largest music company on what was, by many metrics, a huge year for the label and publishing conglomerate.
In his 2,500 word note, obtained by Billboard, Grainge went over many of the points that he raised in his New Year’s note in 2023, when he called for an “updated model” for the music industry, calling for streaming royalty reform in the face of increased fraud and a flood of non-artist music on platforms, and a forward-looking policy in confronting the challenges and opportunities brought by AI, including government protections for copyright and creators. And in this year’s letter, he touted UMG’s achievements on those fronts in the past year, citing the “several global platforms, including the world’s largest music platform, have already adopted artist-centric principles that will transform the way artists are compensated for their work,” referencing new royalty models proposed by Deezer, Spotify and others.
And on the AI front, Grainge cited UMG’s Responsible AI initiative, which lobbied the U.S. Congress on behalf of creators in protecting their works, as well as UMG’s partnership with YouTube to allow artists to develop tools to be able to utilize the advances that AI has brought. Grainge also mentioned UMG’s efforts in the spaces of health and wellness, climate change, sustainability and societal change, through its many task forces and foundations that have fought to promote and donate to coalitions that have helped feed the homeless, promote initiatives that use music to contribute to improved mental and physical health and other initiatives, including increased health care opportunities for musicians and their families.
And he also touted the massive success of UMG’s artists, publishing clients and labels, which dominated year-end charts, including Billboard’s. “To put it succinctly: UMG is the most successful company in the history of the music industry and every one of us should be enormously proud of what we have accomplished together, let alone what I know we will accomplish going forward,” Grainge wrote.
In shifting towards the future, Grainge first noted that UMG had continued its global expansion in the past year, particularly through the expansion and restructuring of distribution company Virgin Music Group, in the Middle East/Northa Africa, Thailand, India and China, to name a few. That is a plan that Grainge says promises to continue: “We will keep growing our presence around the world by doing just what we do in more established music markets: signing and developing local artists; providing local labels and entrepreneurs with global promotion, distribution, and a full suite of artist services; and acquiring local labels, catalogs and artist services businesses.”
In terms of other plans for 2024, Grainge notes that “both the pace of change and our industry leadership will increase significantly.”
In his 2023 note, Grainge wrote about the importance of addressing streaming royalty reform and making sure artists get their deserved share of the royalty pie; in 2024, he’s focused more on “grow[ing] the pie for all artists, by strengthening the artist-fan relationship through superfan experiences and products.” Grainge says that will be accomplished both through internal improvements and through partnerships with various platforms. And he promised to continue their already-underway push in protecting and promoting creators’ voices in the AI discussion.
“In short,” Grainge writes, “We are creating the blueprint for the labels of the future.”
What that blueprint may look like is still to come, however; Grainge also notes that the company will “further evolve our organizational structure,” suggesting that changes to how the overall company operates are on the horizon.
“As you know, over the past several years, we have been investing in future growth, not just expanding geographically and leveraging new technologies, but building our e-commerce and D2C operations,” Grainge writes. “In 2024, as we continue our industry-leading investments in A&R and artist development, we will further evolve our organizational structure to create efficiencies in other areas of the business, so we can remain nimble and responsive to opportunities as they arise, while also taking advantage of the benefits of our scale. In the face of so much change and opportunity, standing still is never an option.”
Read Grainge’s full New Year’s note to staff below.
Dear Colleagues,
Happy New Year! I want to express my deepest gratitude to every one of you for all of your hard work and also to take a few moments to review with you some of the highlights of 2023 and preview some of what’s to come in 2024.
Once again, 2023 saw Universal Music lead the industry in all major financial and competitive performance metrics, at the same time our artists broke records and topped the charts around the world. To put it succinctly: UMG is the most successful company in the history of the music industry and every one of us should be enormously proud of what we have accomplished together, let alone what I know we will accomplish going forward.
In fact, even beyond our artists’ extraordinary achievements and our financial results, there was so much more to be proud of this year.
By the beginning of 2023, it had become obvious that if the industry were to continue to thrive and the value of our artists’ work respected, a number of critically important issues would have to be confronted. As the industry leader we had a clear vision of how to address these issues. And then we went out and took bold steps to turn that vision into reality.
Last January, for example, I wrote to you about the streaming royalty model. A new model was needed, one that would properly reward the artist-fan relationship and disincentivize fraud and gaming the system. Because artists are at the center of everything we do, we called it the “Artist-Centric Model.”
I’m proud to say that in just a matter of months, several global platforms, including the world’s largest music platform, have already adopted artist-centric principles that will transform the way artists are compensated for their work. In the coming months, I believe you will see more platforms adopting these principles. Why? Because it is the right thing to do both for artists and for the wider music ecosystem. As this new model becomes widespread, the impact will be profound: a healthier, more equitable and more vibrant music ecosystem that rewards all artists — be they major, indie or DIY — at all stages of their careers.
In the same way, we showed the industry the way forward when it came to confronting the challenges and opportunities of AI.
Early on in 2023, many “experts” viewed AI as a looming threat. Our view? Just as we had done with so many other previous proclamations of doom, we rejected that short-sighted appraisal. On the contrary, we saw AI as presenting opportunities. And then, just as we did with streaming, we went out to turn those opportunities into reality.
We launched our Responsible AI initiative this year with two goals in mind. First, to lobby for “guardrails,” that is public policies setting basic rules for AI. In the U.S., for example we are lobbying for legislation that would establish a federal right of publicity to harmonize the protections of artists’ image, likeness and voice from AI deepfakes. We were the first music company to call upon the U.S. Congress to protect artists against unethical uses of AI.
Our second goal was to forge groundbreaking private-sector partnerships with AI technology companies. In the past, new and often disruptive technology was simply released into the world, leaving the music community to develop the model by which artists would be fairly compensated and their rights protected. In a sharp break with that past, we formed a historic relationship with our longtime partner, YouTube, that gives artists a seat at the table before any product goes to market, including helping to shape AI products’ development and a path to monetization.
Because we fundamentally believe the best way to ensure responsible AI development is through partnership and market-led solutions, in addition to YouTube, we are collaborating with several platforms on numerous opportunities and approaches — always with artists at the forefront of our thinking. In addition, our artists have begun working with some of the latest AI technology to develop tools that will enhance and support the creative process and produce music experiences unlike anything that’s been heard before. And to leverage AI technology that would benefit artists, we continue to strike groundbreaking agreements with, among others, Endel and BandLab.
We also advanced our initiatives in areas from health and wellness to sustainability and the environment.
The intersection of music and health is another exciting area about which I am especially passionate. We’ve all had experiences in which music changed our mood or comforted us in times of emotional crisis, or even helped us physically. In fact, it’s one of the reasons why so many of us have chosen to spend our careers in music. I’ve long wanted the powerful relationship between music and health to be more than a handful of subjective observations and anecdotes so that it could become a key component of our strategy.
Building upon our success in creating a robust commercial category in fitness, we’re now leading the industry in music and health. In September, we produced the first-ever Music + Health Summit where we brought our artists together with health entrepreneurs and leading neuroscientists to advance this new category. This came on the heels of us entering into a series of more than 40 license agreements to amplify the possibilities in this space. For example, we are pioneering a new category that we call “prescription music,” an evidence-based health technique built on scientific and medical research. What excites me is that it’s cost-effective, non-invasive and drives truly beneficial results. While it’s a field still in its infancy, this area will become an increasingly important component of our strategy.
In the same spirit of promoting positive change in society, our employees also accomplished amazing things. Throughout 2023, our All Together Now Foundation, Task Force for Meaningful Change, Green Team, Unhoused Coalition, and Employee Matching Program contributed to more than 500 organizations around the world, and supported over 1.2 million meals for those in need.
Moreover, in the more than three years since we established a groundbreaking relationship with the non-profit Music Health Alliance (MHA), 500 UMG and UMPG recording artists, songwriters and their families in the U.S. have received life-changing medical care. With this year’s dramatic jump in the need for mental health care within the artist and songwriter community, the MHA partnership significantly increased its support in that area.
Our efforts to move the industry on issues concerning sustainability and the environment led UMG and Bravado to host the first music industry sustainability summits in L.A., London, and New York. The series brought together industry leaders and innovators who made commitments to institute sustainable solutions across a range of categories including events, merchandise, touring and more. We co-founded the Music Industry Climate Collective, the new music industry alliance to address global climate change. And we became the first standalone major music company to win the approval of its greenhouse gas emission reduction targets by the Science Based Targets initiative, the gold standard for establishing corporate climate goals.
All of these initiatives are of course ultimately powered by the success of our artists and songwriters and the support that our employees around the world provide them. So let’s turn to the achievements of our artists and songwriters which were nothing short of astounding in 2023. Here are just a few examples.
Globally in 2023, UMG had:
On Spotify: Six of the Top 10 global artists: Taylor Swift (at No. 1), The Weeknd, Drake, Feid, Karol G and Lana Del Rey.
On Apple Music: 13 of the Top 20 most-streamed songs globally, with Morgan Wallen’s “Last Night” at No. 1.
On Deezer: The three most-streamed artists worldwide with The Weeknd, Taylor Swift and Imagine Dragons.
On YouTube: Three of the Top 5 songs, with Toosii’s “Favorite Song” at No. 1.
On Vevo: Karol G was the ‘Most Watched Artist’ for the third consecutive year.
On Amazon: The top two artists (Taylor Swift and Morgan Wallen), three of the Top 5 songs and albums, and the world’s most requested artist on Alexa (Taylor Swift).
And to break it down by region:
On Spotify: The four most-streamed artists in the U.S.: Taylor Swift, Drake, Morgan Wallen and The Weeknd.
On Apple Music: Five of the top seven songs in the U.S., with Morgan Wallen’s “Last Night” (at No.1), and “You Proof”; Drake & 21 Savage, “Rich Flex” and “Spin Bout U”; and Lil Baby “Freestyle”.
On the Billboard 200: Six of the Top 10 albums—Morgan Wallen’s One thing At A Time (No. 1), Taylor Swift’s Midnights (No. 2), Drake, 21 Savage’s Her Loss, Metro Boomin’s Heroes & Villains, Morgan Wallen’s Dangerous: The Double Album and Taylor Swift’a Lover;
Republic Records was named Billboard’s top label for the third consecutive year.
In the UK, according to the Official Charts Company, UMG had seven of the Top 10 artists, including Taylor Swift at No. 1, Drake and The Weeknd in the top five.
Also in the UK, UMG had all of the three nominees for the prestigious 2024 BRITs Rising Star award, with Island’s The Last Dinner Party taking the award, marking the third consecutive year a UMG artist has won.
In Germany, after having ALL of the Top 10 albums for a week in mid-November, a feat never before accomplished by any company; UMG finished the year with six of the Top 10 albums.
In Japan, UMG had five of the Top 10 albums according to Billboard Japan, including King & Prince at No. 1, while Ado’s single “Show” held the top spot on the weekly streaming chart for 14 consecutive weeks to finish the year.
In France, UMG had five of the Top 10 tracks overall, and three of the Top 5 tracks on Apple Music.
In Australia, UMG had the No. 1 album for 34 weeks this year, with albums from Taylor Swift, Sam Smith, Morgan Wallen, Lana Del Rey, Metallica, Peach PRC, Lewis Capaldi, Niall Horan, G Flip, Powderfinger, Olivia Rodrigo, Drake, Troye Sivan and The Rolling Stones.
In Canada, UMG had eight of the Top 10 albums, including albums from Morgan Wallen at No. 1, Taylor Swift, Metro Boomin, and The Weeknd, and held the No. 1 album for 33 weeks this year.
UMG Sweden’s Loreen won the Eurovision Song Contest with her single “Tattoo” and UMG Sweden had five of the Top 10 artists on Spotify.
At the Latin Grammys, Karol G swept three major awards, including Album of the Year, and Juanes won Best Pop/Rock Album, marking his 25th Latin Grammy award.
Feid continued his massive rise in 2023, as the third most-streamed Latin artist on Spotify, while Sebastián Yatra was recognized as “Artist of the Year” at the 2023 RIAA Honors.
In China, Wu Qingfeng’s Mallarme’s Tuesday won “Album of the Year” at the Golden Melody Awards.
In Indonesia, “Tak Segampang Itu” by Anggi Marito was the top song of the year on Spotify.
Juan Karlos became the first artist from the Philippines to enter the Top 100 Global Spotify Charts with his song “Ere,” which was No. 1 in the Philippines for 10 weeks.
Our Universal Music Publishing Group songwriters also performed spectacularly:
On Spotify’s 2023 most-streamed artists globally, we had four out of the Top 5 (Taylor Swift, Bad Bunny, The Weeknd and Drake) and seven out of the Top 10.
On Spotify’s most-streamed albums globally, we had four of the Top 5 (Bad Bunny, Taylor Swift, SZA, The Weeknd) and seven of the Top 10.
On Apple Music: UMPG had an interest in seven of the Top 10 most-streamed songs in the U.S.
On Billboard’s Hot 100 Songwriters in the U.S., UMPG had three of the Top 5 with Taylor Swift, Jack Antonoff and SZA.
In total, a spectacular performance. We should all be so proud of our artists and songwriters and the work we do to bring their music to the world.
In 2023, we also continued our strategy to expand our presence in high growth markets around the world — both through the strength of our companies in those regions as well as the expansion of Virgin Music Group.
We acquired Chabaka Music, a leading MENA-based company, as well as a majority stake in RS Group in Thailand.
In India we strengthened our position domestically with an exclusive partnership with Represent, a leading management company.
In China we signed new long-term agreements with superstar Eason Chan and with 2022’s No. 1 IFPI global album seller Jay Chou, that includes his JVR Music label.
Looking to 2024, both the pace of change and our industry leadership will increase significantly. We’ll be moving quickly and meaningfully on many different fronts.
Our pioneering artist-centric strategy will extend its reach. We first focused on a fairer way to allocate the streaming pie among real artists by addressing fraud and other aspects that deprive artists of their just compensation. The next focus of our strategy will be to grow the pie for all artists, by strengthening the artist-fan relationship through superfan experiences and products. We are already in advanced discussions with our platform partners regarding this phase and will have more to announce in the coming months. In addition, we will be building our in-house capabilities through groundbreaking partnerships that will accelerate our artists’ ability to create experiential, commerce and content offerings for their fans. In short, we are creating the blueprint for the labels of the future.
As for AI, we will continue building opportunity for our artists, while also leading the fight to protect them from unethical uses of this technology. And all around the world, we will continue to prioritize and fight for policies in the service of artistry — not at the expense of it. We also expect to announce more real-world commercial applications for artist-driven, ethical AI.
We will keep growing our presence around the world by doing just what we do in more established music markets: signing and developing local artists; providing local labels and entrepreneurs with global promotion, distribution, and a full suite of artist services; and acquiring local labels, catalogs and artist services businesses.
As you know, over the past several years, we have been investing in future growth, not just expanding geographically and leveraging new technologies, but building our e-commerce and D2C operations. In 2024, as we continue our industry-leading investments in A&R and artist development, we will further evolve our organizational structure to create efficiencies in other areas of the business, so we can remain nimble and responsive to opportunities as they arise, while also taking advantage of the benefits of our scale.
In the face of so much change and opportunity, standing still is never an option.
We must continue to fight for our artists and songwriters and stand up for the creative and commercial value of music.
Our vision of the future is filled with possibilities, and acting on our strategy will make those possibilities real — for our artists, our employees, our shareholders and the entire music ecosystem.
I promise 2024 will be an extremely exciting and transformative year for our company.
Lucian
Did You Get the Memo? Read Last Year’s Note From Lucian Grainge
LONDON — Paid-for streaming revenues grew to a record high of £1.86 billion ($2.4 billion) in the United Kingdom last year, helping drive a 9.6% rise in overall music spending, according to year-end figures from the Digital Entertainment and Retail Association (ERA).
In 2023, British music fans spent a total of £2.2 billion ($2.8 billion) on music purchases via subscriptions to music streaming services like Spotify and Apple Music, and vinyl and CD purchases. That’s more-or-less equal to 2001’s total, the historic peak of the CD era, when U.K. music sales stood at just over £2.2 billion, reports ERA. When compared to 2019, the last full year pre-pandemic, music sales have climbed by almost 39% in the space of four years.
Driving the growth was a 9.8% year-on-year rise in subscription streaming revenues, while spending on physical formats was up 10.9% to £311 million ($395 million) the London-based organization says in its preliminary annual figures published on Tuesday (Jan. 9).
Breaking down physical music revenues, vinyl album sales grew 18% to £177 million with Taylor Swift’s 1989 (Taylor’s Version), The Rolling Stones’ Hackney Diamonds and Lana Del Rey’s Did You Know There’s A Tunnel Under Ocean Blvd among the year’s best-selling titles.
Despite CD sales falling 7% year-on-year in volume terms to 10.8 million units, revenue from the long-written-off format actually rose 2% in 2023 to £126 million ($160 million), marking the first increase in CD revenue in two decades.
ERA says the growth can be attributed to the format’s continued popularity among dedicated music fans, keen to buy their favorite artists in multiple and deluxe formats, as well as a rise in the number of Gen Z and Millennials buying CDs.
This Life by British pop group Take That was 2023’s top CD album in the U.K. with just over 127,000 units sold. Swift’s 1989 (Taylor’s Version) was the year’s second most popular CD release.
Streaming now makes up more than 88% of all music sales in the U.K., compared to 64% five years ago, with physical formats accounting for 9.4% of today’s market, according to labels trade body BPI, which released its year-end listening figures last week.
BPI reports that more than 179 billion music tracks were streamed in the U.K. in 2023, up 12.8% on the previous year’s total, with the equivalent of 182.8 million albums streamed or purchased in 2023 across digital and physical formats, up 10% on the previous 12 months.
In a statement, ERA CEO Kim Bayley said the year-end figures represented a “red letter day” for the U.K. music industry with the rise in revenues “a testament not just to the creativity of artists, but to the entrepreneurial drive of digital services and retailers.”
Although both ERA and BPI use Official Charts Company sales data as the basis for their reporting, the two organizations take different approaches to measuring the health of the recorded music business. ERA’s figures are based on retail spending in the U.K., whereas BPI’s measure music consumption levels. (ERA’s subscription streaming numbers are estimates based on information provided by digital services and label trade income reported to BPI). BPI and ERA are both due to publish their full annual reports later in the year.
Overall, revenues across the U.K. entertainment market – comprising of music, video and games retail sales – were up 7% on 2022’s total to a record high of £11.9 billion ($15.1 billion), marking the eleventh successive year of growth. Streaming and digital services accounted for almost 92% of entertainment revenue, reports ERA.
Of the three sectors, recorded music sales are in third place, trailing both games and video (comprising of video-on-demand subscription services such as Netflix and DVD sales), which totaled £4.7 billion ($6 billion) and £4.9 billion ($6.2 billion) respectively.
The U.K. is the world’s third biggest recorded music market behind the U.S. and Japan with sales of just under $1.7 billion in trade value, according to IFPI’s 2023 Global Music Report.
On Wednesday, Jan. 31, the Recording Academy’s Producers & Engineers Wing will come together with its Songwriters & Composers Wing at the Grammy Museum in downtown L.A. to host “A Celebration of Craft.” The event will honor Leslie Ann Jones, a seven-time Grammy winner and the first woman chair of the Recording Academy’s board of trustees (1999-2001), who has been a top recording and mixing engineer and record producer for more than four decades.
The celebration — a first joint Grammy Week event for the Academy’s craft wings — will kick off the Academy’s official events in the lead-up to the 66th annual Grammy Awards.
The event will also shine a light on this year’s nominees for songwriter of the year, non-classical.
“I’m so excited for our Producers & Engineers and Songwriters & Composers Wings to come together for A Celebration of Craft later this month,” Harvey Mason jr., CEO of the Recording Academy, said in a statement. “I look forward to joining with music people from both of these communities to kick off our Grammy Week celebrations.”
Maureen Droney, vp of the Producers & Engineers Wing, added in a statement: “From her decades-spanning recording career to her work as former chair of the Recording Academy’s board of trustees, a co-chair of the P&E Wing, and much more, Leslie Ann Jones has always been committed to the music community and to excellence in recording.”
In her statement, Susan Stewart, MD of the Songwriters & Composers Wing, said: “A Celebration of Craft will mark the first Grammy Week event for the Songwriters & Composers Wing since our Wing was founded in 2021, and we could not be more enthusiastic to come together with our community for an evening dedicated to celebrating their creativity.”
Jones has held staff positions at ABC Recording Studios in Los Angeles, the Automatt Recording Studios in San Francisco, Capitol Studios in Hollywood, and now Skywalker Sound, where she records and mixes music for records, films, video games and TV and produces records, primarily in the classical genre.
Jones, the daughter of famed comedy recording star Spike Jones, serves on the advisory board of Institute for the Musical Arts and on the board of directors of the Game Audio Network Guild (G.A.N.G.). She is also an artistic advisor to the Technology and Applied Composition degree program at the San Francisco Conservatory of Music.
Jones was inducted into the NAMM TEC Hall of Fame in 2019 and was the recipient of the 2022 G.A.N.G. Lifetime Achievement Award. She is also a member of the Library of Congress’ National Recording Preservation Board.
Grammy Week culminates with the 66th annual Grammy Awards at Los Angeles’ Crypto.com Arena on Sunday, Feb. 4. The ceremony will be broadcast live on CBS and stream live and on-demand on Paramount+ at 8-11:30 p.m. ET/5-8:30 p.m. PT.
Warner Music Group and Red Light Management have entered into a strategic partnership designed to help Red Light artists better target the world’s second-biggest music market, Japan.
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Under the pact, Warner Music Japan’s international marketing and ADA divisions will work with Red Light to build a marketing and label channel for Red Light artists. They will also work to foster collaboration between Red Light artists and domestic performers in Japan.
The partnership kicks off with the promotion of Ghostly Kisses, the musical project of French-Canadian singer-songwriter Margaux Sauvé, who is signed to British label Akira Records. She performed for the first time in Tokyo in December ahead of her new album release set for early this year.
Red Light Management’s roster of artists, writers and producers includes Dave Matthews Band, Punctual, Enrique Iglesias, Brittany Howard, Lady A, Lionel Richie, Interpol, ODESZA, Phish, The Strokes, Sabrina Carpenter, Chris Stapleton, Danny L Harle and Lewis Thompson.
James Sandom, managing partner at Red Light Management, said in a statement, “We’re super excited to partner with Warner Music on this initiative to help our artists with a dynamic new route into Japan. The Japanese market has unique characteristics, a landscape requiring bespoke attention and knowledge of the local music and entertainment sector. Bringing this knowledge together with our artists will help them build fan communities in this special market, with the aim of enabling a new generation of artists to find success in Japan.”
Kaz Shimada, COO of Warner Music Japan, added, “In recent years we have worked hard to help international artists connect with local fans as we transitioned from physical to digital. This exciting new partnership is another significant step forward, as we combine our experience promoting some of the biggest global stars in Japan with Red Light Management’s super-talented managers and amazing roster of artists.”
SoundCloud has been eyeing a sale — and actively pursuing initiatives internally “that would increase the valuation of the company” — since the second half of 2022, according to two former employees who spoke to Billboard on the condition of anonymity. Meanwhile, COO and CFO Drew Wilson is preparing to leave the company after nearly three years in the role, according to a staff memo obtained by Billboard.
Sky News reported on Sunday that SoundCloud was planning to pursue a sale in 2024. This has been in the works “for some time,” one former employee tells Billboard. “A lot of decision making has been based on this.”
SoundCloud announced it was slashing 8% of its workforce last May — less than a year after a 20% cut — to achieve “profitability this year,” as CEO Eliah Seton wrote in an email to staff at the time. “The ambition to reach profitability was not just for the obvious reason of being profitable,” the former employee continues. “The bigger need was for this, to sell the company. The stakeholders have major investments; it’s time.” (SoundCloud previously secured a $170 million investment led by The Raine Group and Temasek in 2017, and an additional $75 million investment from SiriusXM in February 2020.)
A rep for SoundCloud declined to comment. The Raine Group also declined to comment.
SoundCloud leadership had previously tossed around the idea — a best case scenario — of reaching a $2.5 billion valuation for the company, sources said. (The company likes to aim big: In internal meetings, executives also expressed a hope that one of the artists SoundCloud signed to deals in 2022 would have a major chart hit, one of the employees said; this has not happened.)
The more commonly cited valuation goal, the sources say, was around $1 billion. “There’s a billion-dollar-plus opportunity in front of us,” Tracy Chan, who joined SoundCloud as senior vp of creator in 2022, said at an all-hands meeting that year. One of SoundCloud’s former employees said most of the interest in the company came from private equity firms, not music companies.
For comparison’s sake, when Square acquired TIDAL in 2021, the streaming service was valued at around $375 million. Though SoundCloud is not just a streaming service — it also provides tools to creators to help them distribute, market, and monetize music. Creator tools and services brought in more than $26 million for the platform in the first quarter of 2023, according to screenshots from an all-hands meeting shared with Billboard, nearly as much as subscriptions ($29.9 million).
Those screenshots indicate that SoundCloud had a gross profit of around $22 million in the first quarter of the year. But it spent around $4 million on marketing and another $23 million on staffing and general and administrative expenses, leaving it around $5 million short of breaking even.
In May 2023, SoundCloud aimed to reduce that headcount cost through a second round of cuts. (Profitability has been a goal since 2022, if not before: “Investors are looking for companies that are a little more stable right now,” former CEO Michael Weissman told staff during an all-hands meeting that followed the first round of layoffs in 2022. “Investors are looking for companies that are very profitable.”) The company said it finally reached profitability in December.
“Now that we have achieved profitability and are making progress on our strategic plan, we have nothing but opportunity in front of us,” Seton wrote in an email to staff on Monday (Jan. 8) that was obtained by Billboard. “As we have mentioned in previous All Hands [meetings] and AMAs, we will explore a range of options for our capital structure, but there is nothing to report right now, nor will there be any time soon.”
Radio company Audacy has reached a deal with a supermajority of lenders for a prepackaged Chapter 11 bankruptcy deal that will reduce its debt from $1.9 billion to $350 million, the company announced Sunday (Jan. 7). The agreement, first disclosed last week by The Wall Street Journal, will give Audacy’s debt holders equity in the reorganized company.
Chapter 11 proceedings began on Sunday in the United States Bankruptcy Court for the Southern District of Texas. Audacy filed a proposed plan of reorganization that incorporates the terms of the agreement with lenders. The company expects the court to hold a confirmation hearing in February and to exit bankruptcy proceedings once it receives FCC approval.
Some of Audacy’s lenders have committed to providing $57 million in debtor-in-possession financing — $32 million from a term loan and $25 million from an increase in an existing accounts receivable financing facility. The financing, along with the company’s cash from operations, will help Audacy maintain its operations and pay its employees, vendors and partners.
Once the plan is approved by the court, the terms of the current board of directors will expire and a new board of directors will be assigned. The plan of reorganization calls for the new board of directors to adopt a management incentive plan to reward employees and directors of the reorganized company. The plan will set aside 10% of new common stock for stock options, restricted stock, appreciation rights and other equity-based awards.
A 2017 merger with CBS Radio helped Audacy — then named Entercom — expand its business but also increased its debt load. The interest payments would have been more manageable in a growing business, but “the perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp reduction of several billion dollars in cumulative radio ad spending,” David J. Field, Audacy chairman/president/CEO, said in a statement. “These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring.”
The Philadelphia-based company’s portfolio of about 230 radio stations includes WCBS in New York, KROQ in Los Angeles, WFAN Sports Radio in New York and WBBM Newsradio in Chicago. Audacy’s podcasting brands include two studios, Cadence13 and Pineapple Street Studios, and Popcorn, an online marketplace for connecting creators and brands.
Sunday’s announcement eliminated nearly half of Audacy’s remaining equity value as the company’s share price fell 47.1% to $0.1058 on Monday. Audacy has traded over the counter since it was delisted from the New York Stock Exchange in May. A 30-for-1 reverse stock split increased the share price from $0.07 to $2.13 on June 30, but the stock lost nearly all its value over the next six months as financial problems mounted.
Throughout history, music has embraced constructive change and innovation. And we will do so again as we confront the opportunities and risks of artificial intelligence.
Done right, AI should offer avenues for new growth and artistic accomplishment. When creators’ rights are respected, innovation thrives.
Already, music companies have unveiled compelling projects that use AI technologies in groundbreaking ways — with full consent and participation of the artists and rights holders involved. Working together with responsible AI companies, music companies are finding new ways to enhance production and marketing, gain new understandings from data and research, and improve wellness and health. They’ve used it to help identify new audiences for artists and pioneer new ways to celebrate iconic catalogs and performers. This is just the beginning of a new era of possibilities.
But many AI developers are resisting collaborative efforts by the creative sector to develop a responsible policy framework for AI, even though the elements of such a framework are straightforward and common-sense. In short, AI companies must honor:
Authorization: only use copyrighted music if it is authorized (for example, through a license)
Transparency: keep and disclose adequately detailed records of the content on which they train their systems
Authenticity: prevent deepfakes, voice clones, and similar violations of individuals’ rights in their own voice, image, name likeness and identity.
These foundational, consensus principles are detailed by the Human Artistry Campaign and supported by virtually the entire creative community. They set forth a baseline for responsible development and deployment of AI.
But as if on cue, some of the worst instincts of Big Technology have returned. Some AI developers claim it’s “fair use” to scrape up protected music so it can be copied and repackaged by their models. That’s just wrong.
Put bluntly, that’s digital theft.
In every legitimate market in the world, the use of others’ property requires the owner’s consent and agreed-upon compensation. Together, for example, music and technology have developed a burgeoning streaming market built on the common-sense principle that use of copyrighted creative works requires licensing and consent.
Indeed, the developers’ claim that they can use decades’ worth of iconic and extremely valuable recordings for AI without bothering to ask or pay the rightsholders is so far-fetched that former Stability AI developer Ed Newton-Rex quit his job in November rather than be party to an extreme effort to rip off artists and misappropriate their work, explaining via X:
“Companies worth billions of dollars are, without permission, training generative AI models on creators’ works, which are then being used to create new content that in many cases can compete with the original works. I don’t see how this can be acceptable[.]”
It’s not.
This is why transparency is essential. AI developers must keep accurate records of the copyrighted works used by their models and make them available to rights holders seeking to enforce their rights. We need rules requiring that developers maintain adequately detailed records and share this information — or bear the consequences if they fail to produce it. We were pleased to see that the European Union enshrined this as a core principle in its landmark AI Act.
AI policy must also establish clear rules protecting every performer’s right to their own voice, image, name and likeness — the most fundamental cornerstones of individual identity. AI fakes that mine an artist’s body of work to create artificial replicas and voice clones, fashion phony endorsements, or depict individuals in ways they haven’t consented to represent the worst kind of personal invasion. Congress needs to put an end to wrongful appropriation of the most central components of individual human identity.
These are the challenges of 2024.
We either work to continue a strong and sustainable foundation for music in the era of generative AI that moves both art and technology forward together, or generative AI devolves into just another “move fast and break things” novelty that fails to deliver anything of value while eroding our culture.
These are the choices policymakers will face this coming year. Let’s work to help them forge the right path.
Mitch Glazier is chairman/CEO of the Recording Industry Association of America.
Now that Warner Music Group chairman/CEO Robert Kyncl has had a full year at the helm of the major label, he has released a New Year’s note to staff, obtained by Billboard, outlining a plan to kick into gear and set the company up for the next 10 years of changes in the music business.
In the note, Kyncl says he’s referring to the year 2024 as “The Year of the Next 10 — the year when we move at velocity to set ourselves up for a winning decade in the new world.”
“As we start the new year, one thing I’d like us all to remember is that our world has fundamentally changed… the music business is in a very different place than it was 10 years ago,” Kyncl writes. “Now, we’re in a position of strength. That is the time to get ahead for the future.”
He then emphasizes three key areas that he sees as crucial for the next year: growing the engagement with music; increasing the value of music; and evolving how the team works together.
On the first point, Kyncl breaks it down into four main focus points. The first, he writes, is about focusing A&R more on capturing opportunity, including geographically (“based on where artists and songwriters come from and where their streams are going”) and looking forward, as with identifying genres that will grow in the future. The second, in marketing, he emphasizes the partnership between marketing, A&R, tech and business intelligence to better focus efforts and better use the data available. The third, in catalog, emphasizes the ability to market and promote WMG’s extensive catalog on the same lines as it does its frontline music, particularly in digital optimization, given that catalog is driving some 70% of consumption in the current market. And finally, he emphasizes distribution and administration, in beefing up both the services available to the “middle class of artists” and in the major’s publishing admin business, which he wants to scale up further.
The second point, focusing on value, is about solving in 2024 for some of the conversations that rose up and started to dominate in 2023: namely, the value of artists and music on streaming platforms, as well as the issues surrounding the dilution of the royalty pool from the likes of functional music and white-noise tracks. Kyncl has previously spoken about the importance of streaming services raising prices, which many did in the past year, which he stresses as well. And finally, he stresses the need to further develop artist-to-superfan relationships, which he calls “relatively untapped and under-monetized,” though notes that WMG has initiatives in the works in many of these areas already.
The final point, on working together, is about reorienting how the WMG team works, including through leaning into expertise, transparency, flexibility, collaboration across departments and within teams, relying on metrics and not being afraid to lead rather than follow the industry.
Kyncl also takes time to point out some of WMG’s successes in the past year, including big years by the likes of Zach Bryan, Jack Harlow and Gunna; returns from Dua Lipa, David Guetta and Ed Sheeran; and catalog victories for the music of David Bowie, Madonna and Talking Heads, among others, while looking forward to new music from Gabby Barrett, Maria Becerra, Green Day and more.
Looking at the past several decades in 10-year chunks is a useful way of catching snapshots of how markedly things have changed. In 2004, the CD boom had decidedly stalled, as piracy began to take chunks out of the record industry and the business was in the midst of its protracted struggle with piracy and the digital revolution. By 2014, the industry had effectively bottomed out, with recorded revenues hitting their nadir as streaming had been introduced but had yet to catch on as a viable, much less dominant, format for the business. Now, in 2024, with streaming far and away the biggest source of revenue for a booming business, the revenue model is being hotly scrutinized, as new technologies and increasing fraud and volume threaten to overwhelm the now-established status quo.
In that respect, Kyncl sees this year as a pivotal one to answer several of these big questions, and set WMG up for the next decade of challenges and opportunities in the business. “We’re going to fuel the growth of this company using the same resourcefulness and determination with which we develop our artists and songwriters,” he writes. “Because ultimately that’s what will serve them best.”
Sports and music company The Familie has expanded to Nashville, and is set to make Music City the company’s national headquarters.
“Nashville is a city that is inspired by culture, diversity, arts and entertainment, and – from a business perspective – encourages entrepreneurship and growth with no state-income tax and a low barrier to entry for real estate, including commercial real estate,” The Familie founder/CEO Steve Astephen tells Billboard via email.
The Familie’s roster includes Machine Gun Kelly, Avril Lavigne, Jaden Hossler, Games We Play and sombr.
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Former Universal Music Group Nashville executive vp of promotion Royce Risser will lead the company’s new country music division and oversee the Nashville office’s operations. Chase Berlin has been hired as the company’s first artist manager in Nashville.
Risser has more than three decades of music industry experience, starting at MCA Records as an intern in 1991 before being hired as a promotion assistant. Risser rose through the ranks at UMGN, leading promotion efforts and rising to executive vp of promotion. Along the way, Risser worked with artists including George Strait, Vince Gill, Reba McEntire, Luke Bryan, Keith Urban, Chris Stapleton, Sam Hunt, Eric Church, Carrie Underwood, Dierks Bentley, Jon Pardi and Brothers Osborne.
Berlin will work under Risser to sign and develop country artists and build out the genre’s division for The Familie. A University of Florida graduate, Berlin previously worked at management company The AMG and at WME.
“It’s been immediately clear to me that The Familie does things differently,” said Risser in a statement. “I appreciate the team’s non-transactional approach to management, thoughtfully building artist brands and legacies through collaboration and a vast network of cross-industry alliances. Steve Astephen could easily be the smartest, most connected person I’ve ever met and can’t wait to work alongside him in this role. I know this team will be a refreshing addition to the Nashville scene while also integrating with and honoring the history and pedigree of Music Row. I’m absolutely fired up and honored to be at the helm of The Familie’s arrival in Nashville.”
Astephen tells Billboard, “Diversity of thought and experience is what helped us transform sports representation in the 2000s and it’s what will help us do the same in music — which is essentially to not just think outside the box, but to create the box…I entered sports representation from a brand and retail perspective, then music management from a sports agency perspective. Royce has been in radio, which, of course, drives country music. He’s been in marketing and promotions. These are the types of things that add additional opportunities for an artist who signs with us. If you sign with The Familie as a musical artist, we’re looking at: How do we bring you into the sports world? How do we bring you into radio marketing? We’re not just managing an artist’s career, we’re expanding it.”
The first artist signed to the company’s country division is singer-songwriter Evanthia Theodorou.
“She’s the perfect example of the type of artist we look for, which is someone with a 360 degree brand, who is highly marketable, personable, has good values, and appeals to a wide audience through various channels of promotion,” Astephen says, estimating that the country music division could represent up to seven artists.
Astephen launched The Familie in 1998; the company also works with sports figures including football player Daniel Carlson, surfer Eli Hanneman, rally driver Oliver Solberg and tennis player Cooper Williams.
Looking ahead, Astephen says The Familie is making its move into Nashville at the perfect time. “I see the industry shifting to show how marketable the country music genre is globally,” he says. “Obviously, we have to respect what Nashville is to country music, but country artists are global superstars and only growing. So with us coming in–along with other companies–I think you’ll see more brand partnerships, more national television commercials. I’m really excited for us to be part of this and to help challenge the industry to do more than just traditional music management.”